The Central Bank of Nigeria (CBN) has maintained all key monetary policy rates, keeping the Monetary Policy Rate (MPR) at 27.5%, despite growing concerns from the private sector over the impact of high interest rates on business growth.
CBN Governor Olayemi Cardoso announced the decision on Tuesday following the 301st Monetary Policy Committee (MPC) meeting held in Abuja. This marks the seventh consecutive retention of the benchmark interest rate, as the apex bank focuses on sustaining disinflation and stabilizing Nigeria's macroeconomic environment.
Cardoso explained that the decision aligns with the bank's strategy to contain inflationary pressures while maintaining economic stability. "This decision was premised on the need to sustain the momentum of disinflation and sufficiently contain price pressures," he stated.
Alongside the retained MPR, other key parameters remain unchanged:
- Cash Reserve Ratio (CRR): 50% for Deposit Money Banks; 16% for Merchant Banks
- Liquidity Ratio (LR): 30%
- Asymmetric Corridor: +500/-100 basis points around the MPR
Meanwhile, Nigeria's foreign reserves have risen to $40.11 billion as of July 18, 2025—the highest level recorded since November 2024. This figure, equivalent to approximately 9.5 months of import cover, represents a significant boost to the country's foreign currency buffers.
The governor also revealed that eight commercial banks have fully met the recapitalisation requirements, with others progressing toward compliance. He emphasized the importance of this for maintaining the stability and resilience of the financial system.
LCCI pushes back, calls for SME-focused support
Despite the CBN's optimism, the Lagos Chamber of Commerce and Industry (LCCI) raised concerns about the burden of a 27.5% interest rate on businesses, especially small and medium-sized enterprises (SMEs).
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In a statement issued by Director General Dr. Chinyere Almona, the Chamber noted that while headline inflation slightly declined to 22.22% in June, credit remains inaccessible for many small businesses due to high borrowing costs.
"Nigerian businesses and households continue to grapple with high operating and living costs, increasing the cost of credit," the LCCI said. It called for targeted interventions and concessional financing to support growth-critical sectors such as agriculture, power, and infrastructure.
The Chamber stressed that rate hikes alone cannot curb inflation, advocating for a coordinated approach with fiscal authorities to address core issues like insecurity, infrastructure deficits, and food supply chain disruptions.
Calls for reform and transparency
The LCCI further urged the CBN to:
- Complement its policies with non-cash-based, SME-friendly measures
- Promote market-driven reforms to stimulate investment and production
- Ensure transparency in lending practices and prevent excessive margins over the MPR
- Introduce managed rate cuts before year-end to ease borrowing pressure amid tax reform transitions
As the 2024 capital expenditure budget is extended to December 2025, analysts believe the coming months will be crucial for aligning monetary policy with the real sector's recovery and long-term economic stability.
